NWG: NatWest Group Reports Strong Q3 2025 Profit and Upgrades Outlook

NatWest Group (NWG.US) reported a strong financial performance for Q3 2025, with an attributable profit of £1.6 billion. This represents a substantial 36.3% increase compared to Q3 2024 and a 29.3% rise from Q2 2025. Total income for the quarter reached £4.3 billion, an 8.2% increase from Q2 2025 and a 15.7% increase from Q3 2024. The company also improved its Return on Tangible Equity (RoTE) to 22.3%, marking a 4.6% increase from Q2 2025 and a 4.0% increase from Q3 2024.

Key Business Drivers

NatWest Group demonstrated robust growth across all customer businesses, with net loans to customers increasing by £8.2 billion to £415.3 billion in Q3 2025. Customer deposits, excluding central items, remained broadly stable at £434.7 billion. The strong loan-to-deposit ratio of 95% and a Liquidity Coverage Ratio (LCR) of 148% underscore the bank's solid financial position.

Operational efficiency continued to improve, reflected in a 5.3% year-to-date improvement in the cost-to-income ratio to 48.8%, down from 54.1% in Q3 2024. Active balance sheet management contributed to a £2.2 billion benefit from Risk-Weighted Asset (RWA) management actions, creating capacity for further growth. The Common Equity Tier 1 (CET1) ratio increased by approximately 60 basis points compared to both Q4 2024 and Q2 2025, reaching 14.2%.

Segment Performance

Retail Banking delivered a strong performance with total income of £1,662 million in Q3 2025, a 4.3% increase from Q2 2025 and a 13.9% increase from Q3 2024, primarily driven by deposit margin expansion and the acquisition of Sainsbury's Bank balances. Private Banking & Wealth Management also saw a 3.6% increase in total income quarter-over-quarter to £284 million, benefiting from balance growth across lending and Assets Under Management and Administration (AUMA).

Commercial & Institutional reported total income of £2,208 million in Q3 2025, up 2.8% from Q2 2025, driven by deposit margin expansion and lending growth. This segment notably provided £6.3 billion in climate and transition funding, supporting customers in their journey towards net zero.

Management Outlook

NatWest Group has upgraded its income and returns guidance for 2025, now expecting income excluding notable items to be around £16.3 billion and to achieve a Return on Tangible Equity of greater than 18.0%. The company anticipates introducing guidance for 2026 and new targets for 2028 with its Full Year 2025 results in February 2026.